Best Credit Card for Your Credit Score

Best Credit Card for Your Credit Score

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Looking for a new credit card? It might be tempting to apply for the best credit card, even if you don’t have the best credit. While shooting for the card with the best rewards makes sense, it might not be the smartest idea. If you get turned down more than once, it can start hurting your credit score, and then your best credit card for credit score prospects will worsen.

Your credit score matters quite a bit when it comes to the type of credit card you can get — or whether you can get one in the first place. For example, if your credit score is 600 and under, your only options may be secured cards. On the other hand, if you have excellent credit, meaning that your score starts somewhere at 750 or north of it, you can expect the best credit card perks, the best APR, the best fee situation, the best everything. If you have good or average/fair credit, you should still be able to qualify for credit cards with decent perks and interest rates.

If I Have Excellent Credit, What Should I Look For in a Credit Card?

When your credit is excellent, you shouldn’t have to settle for a card that doesn’t offer the creme de la creme. In fact, many cards for people with top-of-the-line credit offer hugely generous bonuses if you charge above a certain amount during a time period, say your first three months.

Here’s an example. Suppose you love vacations, so you choose a card that gives you travel miles if you charge at least $3,500 in your first three months. In exchange, you receive bonus points that, when you redeem them, equal hundreds of dollars in travel rewards. Such cards can also give you financial incentives for travel-related purchases and don’t charge foreign transaction fees.

If traveling is not your priority, many top-notch credit cards still give one-time bonuses or rewards if you meet a minimum dollar amount of purchases after signing on with the issuer. You just get the, say, $400 back in the form of another type of reward, such as a gift card.

In addition to these bonuses for new members, you should expect perks such as the lowest credit card interest rates around and a 0 percent introductory APR for a time period, such as one year, which is perfect if you wind up carrying a balance. There are many great cards and rewards for people who have different priorities, so it is worth your while to compare at least several cards.

Chase Sapphire Preferred Card

Welcome offers: The card offers 50,000 bonus points after you spend $4,000 on purchases in the first 3 months. That’s $625 toward travel when you redeem through the cards website.

Rewards: You get 2X points on travel and dining at restaurants worldwide and 1 point per dollar spent on all other purchases.

Features: One of the great benefits of the card is you get 1:1 point transfer to leading airline and hotel loyalty programs. You also get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. There are also no blackout dates or travel restrictions when you book through Chase Ultimate Rewards.

Fees: The annual fee is $95, but there is no foreign transaction fee, which is great for travels.

Why get this card: It was named a ‘Best Travel Credit Card’ by MONEY® Magazine.

The Platinum Card from American Express

Welcome offers: The card offers 60,000 Membership Rewards points after you spend $5,000 on purchases in the first 3 months.

Rewards: You get 5X Membership Rewards points on on flights booked directly with airlines or with American Express Travel, as well as on eligible hotels booked on amextravel.com.

Features: American Express offers some stellar perks with this card, including Uber VIP status and free rides in the U.S. of up to $15 per month plus a $20 bonus in December, a $200 Airline Fee Credit, access to the Global Lounge Collection, and complimentary benefits from Fine Hotels & Resorts with an average total value of $550.

Fees: Since the card offers so many rewards, the annual fee is $550, but there is no foreign transaction fee.

If I Have Good Credit, What Should I Look For in a Credit Card?

If your credit is good (with a score ranging from about 680 to 749), look for credit cards that offer many of the same things the top-tier cards do. You can likely enjoy similar perks, especially with travel cards, but perhaps not as lavish. For example, you still should be able to qualify for 0 percent APR offers and bonuses for meeting purchase minimums in your first few months. The bonuses might not be for as much money, but they are still incredibly nice.

It is a good idea to consider what matters more to you: the rewards/bonuses or a low interest rate. For example, if you’re unsure you will pay your balance in full every month, then a card with a low interest rate, or APR, may be preferable even if that means you forego some tempting rewards. On the other hand, if you believe you can and will pay your card balance in full every month, you may feel safer choosing a card with liberal rewards and a higher APR.

Welcome offers: The card offers 50,000 bonus points after you spend $e,000 on purchases in the first 3 months. That’s $500 toward travel when you redeem through the cards website.

Rewards: You get 2X miles on every purchase, as well as 10X miles on thousands of hotels when you book at Hotels.com.

Features: You get up to $100 for your application fee to Global Entry or TSA-Precheck. There is no limit to the miles you can earn and the miles won’t expire as long as you have your account. There are also no blackout dates or travel restrictions.

Fees: The annual fee is $95, which is waived for the first year, and there is no foreign transaction fee.

If I Have Average Credit, What Should I Look For in a Credit Card?

You still have some options when your credit is average or fair, meaning that it hovers between 600 and 679. The priority for many people in this range to find a card with the lowest APR possible versus one that offers rewards. But don’t settle for just any one of the good credit cards for average credit; if think you can make payments of the full balance every month, you have more choices.

In general, though, don’t expect to see too many cards offering substantial rewards. Not surprisingly, the higher your score (say 650 to 679), the more reward cards you might qualify for or the lower your interest rate might be.

In this average/fair bracket, you can find credit cards that don’t charge annual fees. If you like to take trips, you should also be able to find a card that doesn’t charge foreign transaction fees. In fact, if it is a travel-oriented card you want, you might be able to snag one that people with good and excellent scores are also able to qualify for. Also, some companies give their cardholders double rewards at the end of their first full year.

The bottom line is that you do have choices with average or fair credit, but it helps to know what you want going into your search and to remain realistic with your fee, APR and rewards expectations. With patience, you can find one of the best credit cards for average credit.

Capital One Quicksilver One Cash Rewards Credit Card

Best for: People who don’t want to keep track of rotating reward categories. Learn more.

Rewards: With this card, you earn unlimited 1.5% cash back on every purchase.

Features: There are no rotating reward categories or sign-ups that you need to do to earn your rewards. Your cash back also won’t expire as long as you have the account, and there are no limits on what you can earn.

Credit help: You can get access to a higher credit line after you make the first five monthly payments on time. You also get access to the CreditWise app, which can help you monitor your credit profile.

Fees: The annual fee is $39.

Why get this card: It takes the guess work out of your credit card rewards.

If I Have Bad Credit, What Should I Look For in a Credit Card?

If your credit is bad, you may not able to get a traditional credit card at all. However, you might qualify for a secured credit card. With this type of card, you put down a cash deposit, say $500. You are then allowed to charge up to $500 on the card and pay the balance every month. After a year (or some other time period), you may be able to convert the card into a traditional credit card and get your deposit back.

Particular things to look for include a card that reports to all three credit bureaus. This reporting should raise your credit score as long as your payments are timely. There are also many secured cards that do not charge annual fees and foreign transaction fees, so you can be fee free.

Your credit score is a good indicator of the types of credit card rewards and interest rates you can expect to be offered. People with average or fair credit may enjoy the best rewards from travel cards such as airline cards. On the other hand, the difference in rewards quality, fee situations and APR rates are sometimes big enough that downloading your credit report and correcting any errors may end up making a huge difference. Or you can try a credit repair company to help you get over that hump to that next credit level. Here’s a list of the best credit repair services if you need it.

Capital One Secured MasterCard

Features: It works like a regular credit card and is accepted at millions of locations worldwide. Start off with a $200 credit line after you make a security deposit of $49, $99, or $200, determined based on your creditworthiness. This card also helps you build credit by regularly reporting to the 3 major credit bureaus. You can also get access to a higher credit limit after making monthly payments on time for the first 5 months.

Applying for Credit Cards Can Hurt Your Credit Score

Applying for one credit card won’t affect your score. Applying for two credit cards might not even hurt your score; however, as the number increases, so do the chances that you are dragging down your credit score. When you apply for more than one loan at a time, it can look to lenders as if you are trying to take on too much credit. That’s why the amount of accounts you apply for within a certain period of time – whether it be loans, mortgages or credit cards – will have an affect on your credit score.

That is why it’s smart to apply for a card that corresponds with your credit score. Here is a good list of the best credit cards for each credit score range. Remember, you can even find a good credit card for average credit scores. If you don’t know your credit score, get a free (no credit cards required) credit score here.

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Comments

Koco Latte
•
May 26, 2014

Whats the best unsecured credit Card for a 520 score

Jack Ryder
•
June 1, 2014

It will be very difficult to find an unsecured credit card for a 520 score. It is probably best to start with a secured card that reports to the credit bureaus and can help raise your score. Once you have a better score, you can apply for an unsecured card.